Peugeot SA Long term credit rating as of 30 January 2013*: Ba3/ BB/BB-

Transcription

1 USD 5-Year 2-Month Credit Linked Note Linked to the credit risk of Peugeot SA Issued by UBS AG, through its Jersey Branch 5-Year 2-Month CLN, Quanto Style SSPA: Miscellaneous Yield Enhancement Certificates (1299) / Private Placement This Product does not represent a participation in any of the collective investment schemes pursuant to Art. 7 ff of the Swiss Federal Act on Collective Investment Schemes (CISA) and thus does not require an authorisation of the Swiss Financial Market Supervisory Authority (FINMA). Therefore, investors in this Product are not eligible for the specific investor protection under the CISA (this paragraph is relevant to public offerings in Switzerland only). 1. Description of the Product Information on Underlying Description / Underlying Reference Entity Reference Obligation Reference Entity Type Peugeot SA Long term credit rating as of 30 January 2013*: Ba3/ BB/BB- Primary Obligor: Reference Entity Guarantor: None Maturity: 15 July 2014 Coupon: 8.375% ISIN: FR * For the avoidance of doubt, this is the long term credit rating of the Reference Entity and it does not represent ratings of the Notes. European Corporate Product Details Security Numbers / / WKN: UB99RZ / Common Code: Aggregate Nominal Amount / Issue Size USD 1,100,000 Specified Denomination USD 10,000 (Minimum Trading Lot USD 150,000) Issue Price Quotation Settlement Currency Interest Amount per Specified Denomination (the "Interest") 100% of the Specified Denomination (percentage quotation, subject to market conditions) The Products are trading CLEAN. Accrued Interest is NOT included in the secondary market price. USD (Quanto Style; payments made in the Settlement Currency are not subject to the EUR/USD exchange rate) Interest Rate x Specified Denomination x Day Count Fraction Period Interest Rate p.a. Day Count Fraction Year 1 - Year % p.a. 30/360 Dates Trade Date 30 January 2013 Issue Date 4 February 2013

2 2/12 Maturity Date 4 April 2018 (the Scheduled Maturity Date ), subject to the occurrence of one of the following events: 1. A Credit Event Determination Date, in which case the Maturity Date is the later of the Physical Redemption Date, the Cash Redemption Date and the Auction Redemption Date as applicable. 2. A Potential Credit Event, in which case the General Terms & Conditions in relation to Potential Credit Event Extension will apply. Interest Period Interest Period End Dates Interest Payment Dates Credit Event Determination Date Interest shall accrue from and including the initial long Interest Period which will be the period from and including the Issue Date to but excluding the first Interest Period End Date and during each subsequent Interest Period which will be the period between two successive Interest Period End Dates, from and including one Interest Period End Date to but excluding the immediately following Interest Period End Date (each an Interest Period ). If a Credit Event Determination Date occurs during an Interest Period, no further Interest will accrue, be calculated or paid from the Interest Payment Date or, as the case may be, the Issue Date, immediately preceding the Credit Event Determination Date, and any failure to pay any such Interest does not constitute an event of default by the Issuer. 4 April every year, from and including 4 April 2014 to and including 4 April 2018, subject to no adjustment. 4 April every year, from and including 4 April 2014 (long first Interest Period) to and including the Maturity Date, subject to adjustment in accordance with the Business Day Convention specified below. As defined in the General Terms and Conditions Redemption Redemption Amount per Specified Denomination Credit Event Redemption Auction Redemption An amount equal to the Specified Denomination, unless a Credit Event Determination Date, a Potential Credit Event, a Potential Failure to Pay or a Potential Repudiation/ Moratorium, if applicable, occurs in which case redemption shall take place in accordance with Physical Redemption or Cash Redemption or Auction Redemption as applicable. Auction Redemption Noteholders attention is drawn to the fact that due to the operation of the terms relating to Physical Redemption and/or Cash Redemption and/or Auction Redemption there may be a considerable period of time following a Credit Event Determination Date before the Notes are actually redeemed. The Issuer shall redeem the Notes in accordance with the Auction Redemption Terms of the General Terms and Conditions except that the definition of "Auction Redemption Amount" shall be deleted in its entirety and replaced with the following: Auction Redemption Amount: An amount equal to the Aggregate Nominal Amount multiplied by the Auction Final Price, minus the Break Costs subject to a minimum of zero. In the event of Fallback to Cash Redemption, the Issuer shall redeem the Notes in accordance with the Cash Redemption Terms of the General Terms and Conditions except that the definition of "Cash Redemption Amount" shall be deleted in its entirety and replaced with the following: Cash Redemption Amount: An amount equal to the aggregate outstanding principal balance (excluding accrued but unpaid interest) of the Valuation Portfolio (or in the case of Fallback to Cash Redemption the outstanding principal balance (excluding accrued but unpaid interest) of the Undelivered Portion) minus the Loss Amount, minus the Break Costs, subject to a minimum of zero. Unless Fallback to Cash Redemption applies if there is more than one Noteholder, each Noteholder shall be paid its pro rata share of the Cash Redemption Amount. If Fallback to Cash Redemption applies and there is more than one Noteholder, the Calculation Agent

3 3/12 Auction Redemption Date Fallback Redemption Method Tax Redemption Redemption following Breach of Selling Restrictions Redemption following Reference Entity becoming Noteholder shall determine in good faith the share, if any, of the Auction Redemption Amount to be paid to each Noteholder. If the Auction Redemption Amount is zero such amount shall be deemed to be paid on the Cash Redemption Date. Break Cost(s) means: (a)(i) the aggregate costs incurred by the Issuer upon terminating, due to the occurrence of the Credit Event, any hedging arrangement entered into in connection with the issuance of the Notes, including but not limited to, any unwind fees or charges incurred by the Issuer upon termination of any internal interest rate swap or cross currency swap, entered into by the Issuer and UBS AG, London Branch, acting as swap counterparty as if UBS AG, London Branch was an external third party swap counterparty (the Relevant Swap ); (ii) any accrued and unpaid payments due to the Issuer in respect of the Relevant Swap; and (b)(i) the costs, charges, fees, howsoever described, incurred by the Issuer upon terminating any of its term funding transactions that were entered into in connection with the issuance of the Notes, including, but not limited to, any funding transaction entered into, by the Issuer with UBS AG, London Branch acting as deposit provider, as if UBS AG, London Branch was an external third party deposit provider (the Relevant Funding ); and (ii) any accrued and unpaid payments due to the Issuer in respect of the Relevant Funding. All such costs in (a) and (b) above shall be determined by the Calculation Agent acting in good faith and a commercially reasonable manner. Any termination date in respect of a hedging arrangement or Break Cost shall be determined by the Issuer and notified to the Calculation Agent on such termination date, provided that any such termination date shall occur on or prior to the Auction Redemption Date or Cash Redemption Date, as the case may be. The fifth Business Day immediately following the Auction Final Price Determination Date. Cash Redemption Applicable. See Section 4 Part 7 of the General Terms and Conditions Applicable. See Section 4 Part 7 of the General Terms and Conditions Applicable. See Section 4 Part 7 of the General Terms and Conditions Product Structure The 5-Year 2-Month USD-denominated Note with Specified Denomination and Interest payable, provided no Credit Event occurs in respect of the Reference Entity, offers the Investor/Noteholder the annual payment of interest (long first Interest Period) calculated as described above. Credit Related Provisions Reference Entity The entity listed in the table of Section 1 Information on Underlying on Page 1 of this Final Terms and its respective Successors ( the Reference Entity ): The Reference Entity has been designated as a particular Reference Entity Type the designation of such Reference Entity Type is purely for convenience in setting out which terms herein apply to which Reference Entities. Notwithstanding Section 4 Part 3 (Successor Provisions) of the General Terms and Conditions, if the relevant Credit Derivatives Determinations Committee determines that a Reference Entity is subject to a Succession Event (as defined in the 2003 ISDA Credit Derivatives Definitions) the Successor(s) determined by the relevant Credit Derivatives Determinations Committee shall for the purposes of this Note be the Successor(s). In the event that two or more Successors are determined by such Credit Derivatives Determinations Committee then the Credit Related Provisions contained herein and all related Redemption provisions shall be deemed to be pro-rated to apply to the respective Successors in the proportions determined by the relevant Credit Derivatives Determinations Committee. In the event that the relevant Credit Derivatives Determinations Committee fails to determine a Successor(s) following a Succession Event then the Calculation Agent shall notify the Issuer of the selection of any Successor or any Substitute Reference Entity

4 Reference Obligation Affected Reference Entity 4/12 pursuant to the terms of the Notes. In such notice, the Calculation Agent will also notify the Issuer of its selection (in its sole and absolute discretion) of the Reference Obligation for the relevant Reference Entity. The Issuer, or its Nominee, shall notify the Noteholders as soon as practicable after receipt of such notice from the Calculation Agent. Notwithstanding anything to the contrary in the General Terms and Conditions, if, in the sole and absolute opinion of the Calculation Agent, a Succession Event occurs that would result in more than one Successor for a Reference Entity pursuant to the terms of the General Terms and Conditions, the Issuer or the Nominee of the Issuer may select in its sole and absolute discretion only one Successor (which, for the avoidance of doubt, may include the relevant Reference Entity if such entity has been identified as a Successor) to replace the Reference Entity affected by the Succession Event. The substitution of the Reference Entity shall be deemed to be effective on the legally effective date of the Succession Event. The consent of Noteholders will not be required for any amendment required as a consequence of the identification of more than one Successor. In respect of the Reference Entity the Reference Obligation set out next to the Reference Entity in the table in Section 1 Information on Underlying on Page 1 of these Final Terms. The Reference Entity in respect of which a Credit Event Determination Date has occurred. All Guarantees In relation to the Reference Entity, applicable or not applicable as set out in Section 4 Overview. Credit Event In relation to the Reference Entity, the applicable Credit Events as set out in Section 4 Overview. The definitions of Credit Events are set out below under Credit Event Definitions. Deliverable Obligations In relation to the Reference Entity, the applicable Deliverable Obligations set out in Section 4 Overview. The definitions of Deliverable Obligations are set out in the General Terms and Conditions. Credit Event Definitions Credit Event means one or more of the Credit Events specified in Section 4 Overview. If an occurrence that would otherwise constitute a Credit Event, such occurrence will constitute a Credit Event whether or not such occurrence arises directly or indirectly from, or is subject to a defence based upon: (a) any lack or alleged lack of authority or capacity of a Reference Entity to enter into any Obligation or, as applicable, an Underlying Obligor to enter into any Underlying Obligation, (b) any actual or alleged unenforceability, illegality, impossibility or invalidity with respect to any Obligation, or, as applicable, any Underlying Obligation, however described (c) any applicable law, order, regulation, decree or notice, howsoever described, or the promulgation of, or any change in, the interpretation by any court, tribunal, regulatory authority or similar administrative or judicial body with competent or apparent jurisdiction of any applicable law, order, regulation, decree or notice, however described, or (d) the imposition of, or any change in any exchange controls, capital restrictions or any other similar restrictions imposed by any monetary or other authority, however described. Bankruptcy means a Reference Entity (a) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (b) becomes insolvent or is unable to pay its debts or fails or admits in writing in a judicial, regulatory or administrative proceeding or filing its inability generally to pay its debts as they become due; (c) makes a general assignment, arrangement or composition with or for the benefit of its creditors; (d) institutes or has instituted against it a proceeding seeking a judgement of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition (i) results in a judgement of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation or (ii) is not dismissed, discharged, stayed or restrained in each case within 30 calendar days of the institution or presentation thereof; (e) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); (f) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets; (g) has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 calendar days thereafter; or (h) causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in clauses (a) to (g) (inclusive).

5 5/12 Failure to Pay means, after the expiration of any applicable Grace Period (after the satisfaction of any conditions precedent to the commencement of such Grace Period), the failure by a Reference Entity to make, when and where due, any payments in an aggregate amount of not less than the Payment Requirement under one or more Obligations, in accordance with the terms of such Obligations at the time of such failure. Restructuring means that, (a) with respect to one or more Obligations and in relation to an aggregate amount of not less than the Default Requirement, any one or more of the following events occurs in a form that binds all holders of such Obligation, is agreed between a Reference Entity or a Governmental Authority and a sufficient number of holders of such Obligation to bind all holders of the Obligation or is announced (or otherwise decreed) by a Reference Entity or a Governmental Authority in a form that binds all holders of such Obligation, and such event is not expressly provided for under the terms of such Obligation in effect as of the later of the Credit Event Backstop Date applicable to the Notes and the date as of which such Obligation is issued or incurred: (i) (ii) (iii) (iv) (v) a reduction in the rate or amount of interest payable or the amount of scheduled interest accruals; a reduction in the amount of principal or premium payable at maturity or at scheduled redemption dates; a postponement or other deferral of a date or dates for either (A) the payment or accrual of interest or (B) the payment of principal or premium; a change in the ranking in priority of payment of any Obligation, causing the Subordination of such Obligation to any other Obligation; or any change in the currency or composition of any payment of interest or principal to any currency which is not a Permitted Currency. (b) Notwithstanding the provisions of (a) above, none of the following shall constitute a Restructuring: (i) (ii) (iii) the payment in euros of interest or principal in relation to an Obligation denominated in a currency of a Member State of the European Union that adopts or has adopted the single currency in accordance with the Treaty establishing the European Community, as amended by the Treaty on European Union; the occurrence of, agreement to or announcement of any of the events described in (a)(i) to (v) above due to an administrative adjustment, accounting adjustment or tax adjustment or other technical adjustment occurring in the ordinary course of business; and the occurrence of, agreement to or announcement of any of the events described in (a)(i) to (v) above in circumstances where such event does not directly or indirectly result from a deterioration in the creditworthiness or financial condition of the Reference Entity. (c) For the purposes of the definition of Restructuring and the definition of Multiple Holder Obligation the term Obligation shall be deemed to include Underlying Obligations for which the Reference Entity is acting as provider of a Qualifying Affiliate Guarantee or, if All Guarantees are applicable, as provider of any Qualifying Guarantee. In the case of a Qualifying Guarantee and an Underlying Obligation references to the Reference Entity in section (a) above of the definition of Restructuring shall be deemed to refer to the Underlying Obligor and the reference to the Reference Entity in section (b) above of the definition of Restructuring shall continue to refer to the Reference Entity. General Information Issuer Issuer's Rating Lead Manager Calculation Agent Principal Paying Agent Debt Ranking/ Status of the Notes Nominee of the Issuer Business Days Business Day Convention Listing UBS AG, Jersey Branch A2 Moody's / A S&P's / A Fitch UBS AG, Zurich (UBS Investment Bank) UBS AG, London Branch, or any successor thereof. All determinations by the Calculation Agent hereunder in the absence of manifest error, wilful default or bad faith, will be final and conclusive, and the Calculation Agent and the Issuer have no liability to the Noteholders or any third party in relation to such determinations. UBS AG, Zurich Unsecured, Unsubordinated UBS AG, London Branch London, New York Modified Following Unadjusted None

6 Secondary Market Minimum Investment Minimum Trading Lot USD 150,000 Product/Note Clearing System Form of Notes Delivery Governing Law/Jurisdiction 6/12 It is the current practice (but not the legal obligation) of UBS AG and/or its affiliates (UBS), in respect of notes for which UBS is the arranger, to quote on request a live price, which it might pay/charge for early termination of any note of this type that it issues. A live unwind price may be affected by then-current market conditions, liquidity and market standard denomination. UBS is under no obligation to hold a price quoted for any length of time unless this is agreed at the time of giving the quote. USD 150,000 (subject to Selling Restrictions) One 5-Year 2-Month USD-denominated Credit Linked Note with Redemption Amount and Interest payable, provided no Credit Event occurs in respect of the Reference Entity, with the given Specified Denomination is equivalent to one (1) "Product""/Note". "Products"/"Notes" wherever used herein shall be construed to mean integral multiples of the same, subject to the Issue Size. SIX SIS, Euroclear, Clearstream (registered as intermediated securities with SIX SIS AG, in Switzerland) Uncertificated Securities Delivery against Payment Swiss/Zurich Tax Treatment Swiss Federal Stamp Duty Swiss Federal Income Tax Swiss Withholding Tax The product qualifies as a taxable security (bond). In principle secondary market transactions are subject to Swiss Stamp Duty. For private investors resident in Switzerland, the coupon payment (if any) as well as a discount on the issue price and a premium on the repayment (if any) amount are taxable. The issue discount and the repayment premium are taxable at redemption. This product is not subject to the Swiss Issuer Withholding Tax. It depends on the jurisdiction of the issuer whether a foreign issuer withholding tax applies. EU Savings Tax For paying agents in Switzerland, the product is subject to the EU Savings Tax (TK19). The tax information only provides a general overview of the potential Swiss tax consequences linked to this Product at the time of issue. Tax laws and tax doctrine may change, possibly with retroactive effect. Product Documentation These Final Terms together with the UBS General Terms and Conditions for Credit Linked Notes, as amended from time to time (the General Terms and Conditions ) shall form the documentation for this Product (the Product Documentation ), and accordingly the Final Terms should be read in conjunction with the General Terms and Conditions. If there is any inconsistency between the terms set out in the Final Terms and the General Terms and Conditions these Final Terms shall prevail. Unless otherwise stated, definitions used in these Final Terms, but not defined herein shall have the meaning given to them in the General Terms and Conditions, or if not defined therein shall have the meanings as defined in the 2003 ISDA Credit Derivatives Definitions, as may be amended or supplemented from time to time, as published by the International Swaps and Derivatives Association, Inc. During the whole term of this Product, the respective Product Documentation can be ordered free of charge from UBS AG at P.O. Box, CH-8098 Zurich (Switzerland), via telephone (+41-(0) ), fax (+41-(0) ) or via (swissprospectus@ubs.com). In addition, the respective documents are available on the internet at Notices in connection with this Product shall be validly given by publication in electronic media such as Reuters and/or Investdata. In addition, any changes with regard to the terms of this Product shall be published on the internet at keyinvest. Classification This Product does not represent a participation in any of the collective investment schemes pursuant to Art. 7 ff of the Swiss Federal Act on Collective Investment Schemes (CISA) and thus does not require an authorisation of the Swiss Financial Market Supervisory Authority (FINMA). Therefore, investors in this Product are not eligible for the specific investor protection under the CISA.

7 7/12 Furthermore, this Product does not benefit from any depository protection under Art. 37b under the Swiss Federal Law on Banks and Savings Banks (Banking Act) or other forms of deposit insurance under any other laws as might be applicable to this Product. Prudential Supervision UBS AG is authorised and regulated by the Swiss Financial Market Supervisory Authority (FINMA). In addition, its London Branch is authorised and regulated by the Financial Services Authority (FSA) and its Jersey Branch by the Jersey Financial Services Commission (JFSC). 2. Prospects of Profits and Losses 1.) Market Expectation Investors are exposed to the credit risk of the Issuer as well as the credit risk of the Reference Entity (Underlying). Therefore, Investors in this Product expect that during the lifetime of the Product neither a Credit Event with respect to any of the Underlyings nor to the Issuer will occur. 2.) Risk Tolerance Investors in this Product should be familiar with both credit and interest rate markets. Although Investors benefit from regular Interest payments, they must be aware that they receive an Interest that is exposed to the performance of the Underlying which could be worse than the performance expected at the time of the purchase of this Product. 3.) Profit Potential The prospective gain is limited to the Interest. 4.) Loss Potential Principal (to the full extent of the Specified Denomination) and Interest are at risk if a Credit Event as described in the section Credit Related Provisions, Credit Event and Overview occurs with respect to the Reference Entity or its Obligations. Following a Credit Event Determination Date, the Notes will redeem early, and upon redemption, the Investor receives the Auction Redemption Amount (as defined in Section 4 Part 1 of the General Terms and Conditions) which will very likely be below the Specified Denomination of the Product (such amount may be zero). A Credit Event may occur at any time during the term of the Credit Linked Notes and even prior to the Issue Date. Any such Credit Event may be relevant for the Credit Linked Notes, if it has occurred after the Trade Date. Therefore, the Holder may bear the risk that a Credit Event has occurred prior to the Issue Date which may reduce interest and/or principal payments of the Credit Linked Notes and might even result in the total loss of the Holder's investment immediately after the Issue Date. 5.) Risk Factors Relating to Credit-linkage The Notes are also subject to early redemption following a Credit Event. The Notes are securities which are credit linked to the Reference Entity and the obligations of such Reference Entity. Investors should note that Notes differ from ordinary debt securities issued by the Issuer in that the payment of principal and interest by the Issuer is dependent on whether a Credit Event Determination Date has occurred in respect of the Reference Entity. Neither the Issuer, its Nominee, the Lead Manager, the Calculation Agent nor any other party is required to provide any information to Noteholders at any time or from time to time regarding the Reference Entity or its obligations or as to the prospect or likelihood of the occurrence of a Credit Event or a Succession Event or to notify Noteholders of any resolution of any Credit Derivatives Determinations Committee that a Credit Event or a Succession Event has occurred. However, it is expected that certain resolutions of the relevant Credit Derivatives Determinations Committee pertaining to the determination of such events will be announced on ISDA s website at (or any successor website thereto) from time to time in accordance with the Credit Derivatives Determinations Committees Rules, as amended from time to time. Following a Credit Event Determination Date, the Notes will cease to bear interest and the Notes will redeem early, and upon redemption: (i) redemption proceeds in an amount less than the principal amount of the Notes may be paid to the Noteholders (and such amount may be zero); or (ii) Deliverable Obligations the value of which may be less than the principal amount of the Notes may be delivered to the Noteholders (and such value may be zero).

8 8/12 Noteholders attention is drawn to the fact that due to the operation of the terms relating to Cash Redemption, or Physical Redemption, or Auction Redemption (as the case may be) there may be a considerable period of time following a Credit Event Determination Date before the Notes are actually redeemed. A Noteholder is exposed to the credit risk and general risks of the Reference Entity. Investors should have sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of investing in credit linked notes as well as access to, and knowledge of, appropriate analytical tools to evaluate such merits and risks in the context of their financial situation. Noteholders should note that the Reference Entity to which the Notes are referenced may change from time to time as a result of the occurrence of any Succession Events and, if more than one successor Reference Entity is determined as a result of any such Succession Event, the Notes will be required to be amended without the consent of the Noteholders so as to reflect the fact that there will be multiple Reference Entities. The Calculation Agent is responsible for making determinations as to whether a Succession Event has occurred, provided that the Calculation Agent is not required to make any such determination if ISDA has announced that a Credit Derivatives Determination Committee has been convened for such purpose and if such Credit Derivatives Determination Committee has resolved to make such determination. Accordingly, the Issuer and Noteholders will be bound by any such determination of the relevant Credit Derivatives Determination Committee, whether or not their views may differ from that of the relevant Credit Derivatives Determination Committee. Neither the Issuer nor any of its affiliates has made any representation whatsoever with respect to the Reference Entity, any Reference Obligation, any Obligation, any Deliverable Obligation, any Underlying Obligor or any Underlying Obligation on which any Noteholder is relying or is entitled to rely. The Issuer and its affiliates are not responsible for the Reference Entity s public disclosure of information. The Issuer and its affiliates and the Calculation Agent may deal in each Reference Obligation, Obligation, Deliverable Obligation or Underlying Obligation and may, where permitted, accept deposits from, make loans or otherwise extend credit to, and generally engage in any kind of commercial or investment banking or other business with, a Reference Entity, any Underlying Obligor or any affiliate of a Reference Entity or an Underlying Obligor, or any other person or entity having obligations relating to a Reference Entity or any Underlying Obligor, and may act with respect to such business in the same manner as each of them would if the Notes did not exist, regardless of whether any such action might have an adverse effect on a Reference Entity, any Underlying Obligor or the position of any Noteholder or otherwise (including, without limitation, any action which might constitute or give rise to a Credit Event). The Issuer and its affiliates and the Calculation Agent may, whether by virtue of the types of relationships described herein or otherwise, at any time, be in possession of information in relation to a Reference Entity or any Underlying Obligor that is or may be material in the context of the issue of the Notes and that may or may not be publicly available or known to the Noteholder, and the Notes do not create any obligation on the part of the Issuer or its affiliates or the Calculation Agent to disclose to any Noteholder any such relationship or information (whether or not confidential). The Reference Entity is not involved in the issuance of the Notes in any way and has no obligation to consider the interests of the Noteholders in taking any corporate actions that might affect the value of the Notes. The Reference Entity may, and is entitled to, take actions that will adversely affect the value of the Notes. The purchase price paid for the Notes is paid to the Issuer and not to the Reference Entity, and the Notes do not represent a direct investment in any Obligation of the Reference Entity or otherwise give the Noteholders any rights in the debt obligations of the Reference Entity. As an owner of Notes, a Noteholder will not have special voting rights or rights to receive distributions or any other rights that holders of debt obligations of the Reference Entity may have. There is no guarantee, protection or assurance for purchasers of the Notes in respect of the credit or performance of the Reference Entity, Reference Obligation or Obligations. Neither the Issuer nor any of its affiliates makes any representation as to the future performance of the Notes either in absolute terms of relative to other investments. The likelihood of a Credit Event occurring in respect of any Reference Entity will generally fluctuate with, among other things, the financial condition and other characteristics of such Reference Entity, general economic conditions, the condition of certain financial markets, political events, developments or trends in particular industry and changes in prevailing interest rates. Some Reference Obligations and Deliverable Obligations may have no, or only a limited, trading market. The liquidity of Reference Obligations and Deliverable Obligations will generally fluctuate with, among other things, the underlying liquidity of the loan and bond markets, general economic conditions, domestic and international political events, developments or trends in a particular industry and the financial condition of the relevant Reference Entity. Some or all of the Reference Obligations and Deliverable Obligations may also be subject to restrictions on transfer and may be considered illiquid. If a Credit Event Determination Date occurs in respect of a Reference Entity, any resulting diminution in market value of the related Reference Obligation and/or Deliverable Obligations could be further magnified by reason of such limited liquidity for that Obligation or that Reference Obligation in particular. Any quotations used in the calculation of the Cash Settlement Amount (where applicable) may be affected by factors other than the occurrence of the Credit Event. Such prices may vary widely from dealer to dealer and substantially between Valuation Dates. The Valuation Obligations selected, even absent a Credit Event, may be illiquid and such illiquidity may be expected to be more pronounced following the occurrence of a Credit Event, thereby adversely affecting any determination of the value of such obligation which in turn will impact on the amount by which the Cash Settlement of the Notes may be reduced. Following

9 9/12 a Credit Event Determination Date, the Issuer or the Nominee of the Issuer is entitled to select an Obligation for delivery (or, if Cash Settlement applies, for valuation) which has the lowest value in the market at the relevant time providing such obligation satisfies certain specifications and limits for qualification as a Deliverable Obligation. Where Auction Redemption is specified as being applicable and an Auction Final Price Determination Date occurs, the Auction Final Price will be determined according to an auction procedure set out in the relevant Credit Derivatives Auction Settlement Terms, available on ISDA's website at (or any successor website thereto). Noteholders should note that the relevant Credit Derivatives Determinations Committee has the power to make binding decisions on critical issues such as whether a Credit Event has occurred, which obligations are to be valued and whether an Auction should take place in accordance with and as more fully described in the Credit Derivatives Determinations Committees Rules, as amended from time to time and available on ISDA's website at (or any successor website thereto). Consequently, Noteholders will be bound by any such relevant decisions if Auction Redemption is applicable. 3. Significant Risks for Investors For product specific risks please see above (2. Prospects of Profits and Losses) Risk Factors relating to the Issuer In addition to the market risk with regard to the development of the Underlying, each Investor bears the general risk that the financial situation of the Issuer could deteriorate. The Products constitute immediate, unsecured and unsubordinated obligations of the Issuer which, particularly in case of insolvency of the Issuer, rank pari passu with each and all other current and future unsecured and unsubordinated obligations of the Issuer, with the exception of those that have priority due to mandatory statutory provisions. The general assessment of the Issuer s creditworthiness may affect the value of the Products. This assessment generally depends on the ratings assigned to the Issuer or its affiliated companies by rating agencies such as Moody s, Fitch and Standard & Poor s. The Issuer Ratings indicated in this document reflect the situation at the time of issuance and may be subject to changes. The actual Issuer Ratings at any given time can be seen on the Issuer s website ( under Analysts & Investors. Secondary Market The Issuer or the Lead Manager, as applicable, intends, under normal market conditions, to provide bid and offer prices for this Product on a regular basis. However, the Issuer or the Lead Manager, as applicable, makes no firm commitment to provide liquidity by means of bid and offer prices for this Product, and assumes no legal obligation to quote any such prices or with respect to the level or determination of such prices. Potential Investors therefore should not rely on the ability to sell this Product at a specific time or at a specific price. In special market situations, where the Issuer is completely unable to enter into hedging transactions, or where such transactions are very difficult to enter into, the spread between the bid and offer prices may be temporarily expanded, in order to limit the economic risks of the Issuer. Market Risk The Investor is exposed to market disruption events (such as trading disruption, exchange disruption and early closure of the relevant exchange), adjustments and early termination which could have an impact on the Redemption Amount through delay in payment or change in value. For a detailed description of such events and their effects please read the General Terms and Conditions. Important Information This information is communicated by UBS AG and/or its affiliates ("UBS"). UBS may from time to time, as principal or agent, have positions in, or may buy or sell, or make a market in any securities, currencies, financial instruments or other assets underlying the transaction to which this document relates. UBS may provide investment banking and other services to and/or have officers who serve as directors of the companies referred to in this document. UBS' trading and/or hedging activities related to this transaction may have an impact on the price of the Underlying asset and may affect the likelihood that any relevant barrier is crossed. UBS has policies and procedures designed to minimise the risk that officers and employees are influenced by any conflicting interest or duty and that confidential information is improperly disclosed or made available.

10 10/12 UBS may have paid a fee to a third party introducer or broker in relation to this transaction. Further, in certain circumstances UBS sells these notes to dealers and other financial institutions at a discount to the issue price or rebates to them for their own account some proportion of the issue price. Further information on the foregoing is available on request..structured transactions are complex and may involve a high risk of loss. Prior to entering into a transaction you should consult with your own legal, regulatory, tax, financial and accounting advisors to the extent you consider it necessary, and make your own investment, hedging and trading decisions (including decisions regarding the suitability of this transaction) based upon your own judgement and advice from those advisers you consider necessary. Save as otherwise expressly agreed in writing, UBS is not acting as your financial adviser or fiduciary in any transaction. This document should not be construed as an offer, personal recommendation or solicitation to conclude a transaction and should not be treated as giving investment advice. The terms of any investment will be exclusively subject to the detailed provisions, including risk considerations, contained in the General Terms and Conditions. UBS makes no representation or warranty relating to any information herein which is derived from independent sources. This document shall not be copied or reproduced without UBS' prior written permission. No action has been or will be taken in any jurisdiction that would permit a public offering of the Products described herein, save where explicitly stated in the Product Documentation. The Products must be sold in accordance with all applicable selling restrictions in the jurisdictions in which they are sold. There is a possibility that costs, including taxes, related to transactions in connection with this Product may arise for the Investor that are not paid by UBS or imposed by it.

11 11/12 4. Overview European Corporate Business Days: USD: London and New York EUR: London and TARGET GBP: London All Guarantees: Credit Events: JPY: London and Tokyo CHF: London and Zurich CAD: London & Toronto Applicable Bankruptcy Failure to Pay Restructuring Grace Period Extension: Payment Requirement: Modified Restructuring Maturity Limitation and Conditionally Transferable Obligation Multiple Holder Obligation: Default Requirement: Obligation(s): Obligation Category Borrowed Money Exclude Accrued Interest: Deliverable Obligations: Physical Settlement Period: Obligation Characteristics: Applicable Deliverable Obligation Category: Deliverable Obligation Characteristics: None Bond or Loan Not Subordinated Specified Currency: Standard Specified Currencies Not Contingent Assignable Loan Consent Required Loan Transferable Maximum Maturity: 30 years Not Bearer 30 Business Days 60 Business Day Cap on Settlement Applicable Additional Provisions for STMicroelectronics NV (December 6, 2007) Not Applicable USD 1,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Failure to Pay. Applicable Applicable USD 10,000,000 or its equivalent in the relevant Obligation Currency as of the occurrence of the relevant Credit Event. Applicable if the Reference Entity is STMicroelectronics NV, otherwise Not Applicable

12 5. Selling Restrictions 12/12 Any Products purchased by any person for resale may not be offered in any jurisdiction in circumstances which would result in the Issuer being obliged to register any further documentation relating to this Product in such jurisdiction. The restrictions listed below must not be taken as definitive guidance as to whether this Product can be sold in a jurisdiction. Additional restrictions on offering, selling or holding of this Product may apply in other jurisdictions. Investors in this Product should seek specific advice before on-selling this Product. Europe - Any public offer of this Product within an EEA jurisdiction (EU member states plus Norway, Iceland and Liechtenstein) shall only be possible if compliant with the requirements of the EUPD and with the law of that jurisdiction. If the prospectus either does not qualify as a prospectus published in accordance with the requirements of the EUPD or is not filed with or notified to the relevant Financial Supervisory Authority, this Product may not be offered or sold in EEA jurisdictions other than 1) in minimum denominations of, or total consideration per investor of at least, EUR 50,000 (or equivalent in other currencies), provided that the offer is only being made in one or more EEA jurisdiction that will not, before the end of the offer period for the Securities, have implemented the provision under the Directive 2010/73/EU (the PD Amending Directive ) that increases this minimum denomination (or total consideration per investor) to EUR 100,000; or 2) only to Qualified Investors; and/or (aggregated for all distributors) to less than 100 or, if the relevant EEA jurisdiction has implemented the relevant provision of the 2010 PD Amending Directive, 150 natural or legal persons that are not Qualified Investors per EEA jurisdiction. "Qualified Investors" are persons or entities as defined in the Prospectus Directive. For information on public offering in EEA jurisdictions please see under section General Information above. Hong Kong - Each purchaser has represented and agreed that it has not issued or had in its possession for the purposes of issue, and will not issue or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the Products, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to Products which are or are intended to be disposed of only to persons outside Hong Kong or only to professional investors as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance. This is a structured product which involves derivatives. Do not invest in it unless you fully understand and are willing to assume the risks associated with it. If you are in any doubt about the risks involved in the product, you may clarify with the intermediary or seek independent professional advice. Singapore - This document has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this document and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of this Product may not be circulated or distributed, nor may this Product be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act (Cap. 289) of Singapore ("SFA"), (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275, of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA. Where this Product is subscribed or purchased under Section 275 of the SFA by a relevant person which is: (a) a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, securities (as defined in Section 239(1) of the SFA) of that corporation or the beneficiaries' rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the securities pursuant of an offer made under Section 275 of the SFA except: (1) to an institutional investor or to a relevant person defined in Section 275(2) of the SFA, or to any person arising from an offer referred to in Section 275(1A) or Section 276 (4)(i)(B) of the SFA; (2) where no consideration is or will be given for the transfer; (3) where the transfer is by operation of law; or (4) as specified in Section 276 (7) of the SFA. UK - For the purpose of non-discretionary accounts, this Product should not be sold with a consideration of less than EUR 100,000 or equivalent. USA - This Product may not be sold or offered within the United States or to U.S. persons.